U.S. judge slaps $1.3 billion fine on Bank of America

NEW YORK — A federal judge imposed a $1.3 billion civil penalty against Bank of America on Wednesday for its role in selling risky mortgages to Fannie Mae and Freddie Mac that were advertised as safe investments.

The fine was against Countrywide, which Bank of America purchased in 2008 as the financial crisis was unfolding. It is the latest legal ruling against Wall Street.

A jury found in October 2013 that BofA was liable for Countrywide's role in selling risky loans to the government housing agencies through a program nicknamed the "Hustle" from August 2007 to May 2008. The jury found that Countrywide executives deliberately misrepresented the quality of mortgages being sold.

In his blunt ruling, Judge Jed Rakoff said the program was "driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole."

This is the first time a bank or its executives have been found liable under federal law for mortgage fraud leading up to financial crisis, said Preet Bharara, U.S. Attorney for the Southern District of New York, in a statement. It is also the first time civil penalties have been imposed on a bank of its executives.

"(It is) clear that mortgage fraud cannot be viewed as simply another cost of doing business in the financial world," Bharara said.

A spokesman for Bank of America said the bank is exploring its legal options following Rakoff's decision, including an appeal.

"We believe (the penalty) simply bares no relation to a limited Countrywide program that lasted several months and ended before Bank of America's acquisition of the company," BofA spokesman Larry Grayson said.

Countrywide is one of many mortgage companies that sold risky mortgages to Fannie Mae and Freddie Mac leading up to the housing bubble popping and subsequent financial crisis.

Bank of America, as well as JPMorgan Chase, have paid out billions of dollars in legal settlements for their roles in the financial crisis, mostly through JPMorgan's purchases of Bear Stearns and Lehman Brothers, and Bank of America's acquisitions of Countrywide and Merrill Lynch.

Rakoff imposed a separate $1 million penalty against Rebecca Maironne, a former Countrywide executive, for her role in the program. Lawyers representing Maironne did not immediately respond to a request for comment.

Yeah, those bankers and financial services managers and administrators were "liberals"; right. Good points "jnfsu". It was the misadventures of this bank and so many others, as well as other financial services institutions, which damaged or all but eliminated the retirements of so many people.

Yet in any discussion of "pensions", especially public employee pensions, and the problems with some of those systems, such companies as these get a "pass". And now, some of those who played a part in these misadventures are apparently not done. They keep trying to get public employee retirements converted to 401(k)'s through which they can "churn" more commissions for themselves.

On the other hand, BoA had a net income last year of $11.43B, and tens of millions of Americans lost their homes, jobs and damned near everything they owned in the Great Recession. It's a shame a lot of these executives weren't imprisoned and impoverished for what they did.

And yet I'll bet most NE Florida conservatives would tell you the whole financial crisis occurred because Liberals made responsible, honest bankers make bad loans to bad people (mostly minorities). And we'd have been better off then, and we'd be better off now, if there was less (or no!) government regulation of the banks and Wall Street. Oh, and, of course, it was Obama's fault.

Right.

These people will steal your children's lunch money and spit in their faces if they can get away with it.

Since humans first existed, some have tried to take unfair advantage of others through hook and crook, and not only have they remembered all of the old scams, they continue to invent new ones every day.

Face it, the only thing protecting the sheep (all of us) from the wolves who seek to prey upon them is reasonable government regulation and enforcement. It's sad, but necessary.

And who protests such regulation and enforcement the most? Why, the wolves, and those who do their bidding, and the foolish who believe them, of course.